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Saurabh Gupta
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Raising money on cash flowing Single family home

Saurabh Gupta
Posted May 16 2023, 08:55

Here is the scenario:

My Rental property (SFH, used to be my PR 4 months back) is valued at 1 Million in North jersey

I have 480K debt on it with 2.6 % interest.

I am getting cash flow of 1100 $( may increase in future)

I moved to FL now and got another PR. Now i need some cash to pay 20 % down( its under-construction SFH)

I have option to either sell or keep it using some innovative strategies.

I would like to keep it and want to know if somehow i can raise money (need around 150k) from private investors and give them either some equity in the home(if it's possible?) OR give them preferred returns.

Refinance would increase my interest rate and not only it would eat the cash flow, i have to pay substantially more every month

The whole point is if it's possible to keep this interest rate and get 150k out of this home?

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Caleb Brown
  • Real Estate Agent
  • Blue Springs
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Caleb Brown
  • Real Estate Agent
  • Blue Springs
Replied May 16 2023, 08:59

You have a ton of equity in the home. I think it's best to sell. You can use some funds as a DP and the rest to invest. 500K+ in equity for $1,100/month doesn't make a lot of sense. I would advise against raising the funds and giving them equity in your home, too risky. 

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Albert Hasson
  • Investor
  • Paradise Valley, AZ
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Albert Hasson
  • Investor
  • Paradise Valley, AZ
Replied May 16 2023, 10:15

You can get a HELOC

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Colin Higgins
  • Real Estate Agent
  • Sanford Florida
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Colin Higgins
  • Real Estate Agent
  • Sanford Florida
Replied May 16 2023, 10:21

Best to ask multiple loan officers on this one, especially those who deal with investors and creative finance situations like this. First thing i think of is a heloc or cash out refinance. Of course interest rates come into play but at the end of the day it just about making the math work. Actually pencil out the math with a mortgage professional for a cash out refi and see if it would still cash flow before we assume that is not an option.

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Bob Stevens#5 Real Estate Wholesaling Questions & Answers Contributor
  • Real Estate Consultant
  • Cleveland
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Bob Stevens#5 Real Estate Wholesaling Questions & Answers Contributor
  • Real Estate Consultant
  • Cleveland
Replied May 16 2023, 10:24
Quote from @Saurabh Gupta:

Here is the scenario:

My Rental property (SFH, used to be my PR 4 months back) is valued at 1 Million in North jersey

I have 480K debt on it with 2.6 % interest.

I am getting cash flow of 1100 $( may increase in future)

I moved to FL now and got another PR. Now i need some cash to pay 20 % down( its under-construction SFH)

I have option to either sell or keep it using some innovative strategies.

I would like to keep it and want to know if somehow i can raise money (need around 150k) from private investors and give them either some equity in the home(if it's possible?) OR give them preferred returns.

Refinance would increase my interest rate and not only it would eat the cash flow, i have to pay substantially more every month

The whole point is if it's possible to keep this interest rate and get 150k out of this home?


 Sell NJ, I left LI  8 years ago.20k in taxes INSANE. I too live in FL, huge raise just by moving, no state tax  and  property taxes, 20% of NY

Buy more rentals CASH with 10?% or better net caps, thats what I do. Just bought another last week, actually 20%ish, NET 

All the best 

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Kerry Noble Jr
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Kerry Noble Jr
  • Investor
  • Indianapolis, IN
Replied May 17 2023, 07:31
Quote from @Albert Hasson:

You can get a HELOC


 yeap thats what i was going to suggest! or a 2nd maybe

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Scott E.
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  • Scottsdale, AZ
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Scott E.
  • Developer
  • Scottsdale, AZ
Replied May 17 2023, 07:41

HELOC would be the right move here. But that would have been better to do while the house was still your primary residence. It's going to be tough finding a lender to do a HELOC on an investment property (although I hear they are still out there).

I don't know any private equity lenders who would feel comfortable going into 2nd position on a single family long term rental.

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Ran Iarovich#3 Real Estate Success Stories Contributor
  • Real Estate Agent
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Ran Iarovich#3 Real Estate Success Stories Contributor
  • Real Estate Agent
  • Washington
Replied May 17 2023, 07:49

Talk with different investor ready lenders. You are interviewing them so don't feel bad about asking hard questions. This will allow you to find the best option for you. 

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Saurabh Gupta
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Saurabh Gupta
Replied May 25 2023, 07:56

Thanks everyone!!